Italy election: O Bella Ciao

For the people in the know Italian election were always been the most interesting and dangerous.

Italy went backwards economically since joined the EURO and even got abandoned by the rest of Europe with the huge influx of immigration. Italians even feel that the “one million migrants” invited by Germany as a ruse – Germany got the top pick of migrants – leaving the bad apple to the rest of Europe.

Italian are destitute and angry. And Italy cannot be left failing like Greece as its banking system and debt market (3rd largest in the world) are too big to let fail.

Even strategically is important. It always had an independent streak – always has been closest to Russia and very friendly with China. Even in the middle east has good relation with Iran and was trying to stop the US attacking Libya.

While there are starting signs of recovery it is too late and most of the recovery is exogenous (more because France, Spain, Germany goes well than anything to do with Italy).

At the moment the current governing party (PD – Left) looks like finished.

The more likely outcome is a right wing alliance Forza Italia (yes, Berlusconi again!) Lega Nord – so a against migrant, pro business, less State.

The pollies are now giving the majority to M5Star (high deficit, universal income, abolishment of the European Fiscal Compact) , but I do not think it could form a coalition.

The parties seems now to avoid taking of an Italexit. But this does not mean there will be trouble.

It looks more like the Italian party decided to work as a fifth column (a minority group that is against the majority) by sabotaging Europe (or better aid the German vision of Europe) by breaching the Germany imposed Deficit limit, supporting France, avoiding the fiscal compact rules, siding with Russia and other mean.

Hence the post is called O Bella Ciao. A very famous Italian song from the 2 World War Partisan. It say Oh beautiful woman bye, I woke up with the invader (German troops) in the town and I leave to the country to fight and die for freedom and Italy.

The outcome of this election will most probably not be market breaking (unless M5 Star win), but they will seed problems that will come up with vengeance in the next recession.